Monday, August 12, 2013

Raising Cable Modem Fees - Ripping Off Consumers

Why would the cable company arbitrarily decide to increase the modem rental fee that it tacks on to your bill each and every month? Because it is a veritable monopoly and it can!

Recently, Time Warner Cable increased its monthly modem rental fee to $6/month--a 50% increase just like that. Ignoring the useless claptrap explaining the increase to customers, this should be viewed as nothing more than a blatant, unilateral step by the corporation to increase revenue without providing any additional value to the customer whatsoever. Worse yet, there is really no justification for such a high fee given the true cost of these boxes as detailed in this article on Gizmodo.

Cable companies count on the unsuspecting, or technologically unaware, or too-busy-to-care consumer to just accept these types of insidious fee increases as a fact of life. The truth is that since the majority of cable modems in use are actually recycled boxes that have been used by one or more customers already, they're more than paid for. So these bloated fees end up being 100% profit for the cable company.

The whole idea of "leasing" network equipment to customers is really just bad business and would never even be discussed in an environment with true competition. To be sure, not charging a monthly fee would be one of the things that competitors would trumpet in an effort to win customers. For now, however, consumers have to grin and bear it.